CEFC Hong Kong Financial Investment (HKG: 1520) shareholder returns were strong, gaining 139% in 1 year

Unfortunately, investing is risky – businesses can and do go bankrupt. But when you choose a business that is truly successful, you can Make more than 100%. Take for example CEFC Hong Kong Financial Investment Company Limited (HKG: 1520). Its share price has already risen by 139% in the past twelve months. And last week, the share price climbed 67%. Looking back, the share price is 38% higher than it was three years ago.

After a strong gain last week, it’s worth seeing if long-term returns have been boosted by improving fundamentals.

Check out our latest analysis for CEFC Hong Kong Financial Investment

CEFC Hong Kong Financial Investment is currently unprofitable, so most analysts would look to revenue growth to get a sense of how fast the underlying business is growing. Shareholders of unprofitable companies generally expect strong revenue growth. As you can imagine, rapid revenue growth, when sustained, often leads to rapid profit growth.

Over the past year, CEFC Hong Kong Financial Investment has seen its revenues decline by 8.1%. So we wouldn’t have expected the share price to rise 139%. This is a good example of how buyers can push prices up even before fundamental indicators show strong growth. Chances are, the drop in income has already been built in, anyway.

You can see how income and income have changed over time in the image below (click on the graph to see the exact values).

SEHK: 1520 Profit and Revenue Growth on December 16, 2021

We love that insiders have bought stocks in the past twelve months. Even so, future profits will be much more important to whether current shareholders make money. It might be worth taking a look at our free CEFC Hong Kong Financial Investment earnings, revenue and cash flow report.

A different perspective

It is nice to see that CEFC Hong Kong Financial Investment shareholders have received a total shareholder return of 139% over the past year. Notably, the five-year annualized TSR loss of 11% per annum compares very unfavorably with recent share price performance. We tend to place more emphasis on long-term performance than short-term performance, but the recent improvement could point to a (positive) inflection point within the company. While it is worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we have identified 3 warning signs for CEFC Hong Kong Financial Investment (1 is a bit obnoxious) that you should be aware of.

There are many other companies in which insiders buy shares. You probably do not want to miss it free list of growing companies that insiders are buying.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently trading on the Hong Kong stock exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.


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